Southern California Faces Health Insurance Cost Surge: What You Need to Know

Residents of Southern California are poised to face significant changes in health insurance costs with the impending expiration of expanded federal premium tax credits. Covered California, the state's insurance marketplace, has been instrumental in providing financial aid to over 800,000 Southern Californians currently receiving subsidies. However, the upcoming expiration of these credits could disrupt current coverage affordability.

The American Rescue Plan temporarily increased federal premium tax credits during the COVID-19 pandemic, enhancing coverage accessibility through platforms like Covered California. Without legislative intervention, these augmented tax credits are set to expire at the year's end. Consequently, Covered California projects that monthly premiums could escalate by an average of 97% for 1.7 million enrollees who currently rely on financial support.

Potential Impact on Insurance Coverage

The cessation of these subsidies primarily affects individuals earning above 400% of the federal poverty level, possibly leading them to forgo insurance coverage if unable to afford the full cost independently. For those considering new enrollment or renewal for 2026, the open enrollment period is available until January 31, 2026. To ensure year-long coverage, selecting a plan by December 31, 2025, is crucial.

The California Franchise Tax Board offers an online tool to calculate any penalties for not holding qualifying health insurance coverage. Furthermore, Covered California recommends submitting applications at least 14 days prior to the desired start date to facilitate timely processing, advising an end date at month’s conclusion. These steps aim to support continuous coverage amid changing regulatory compliance requirements.